Do I need to fill out W-8BEN form for US clients?
brakai295 2010-09-17 04:03:37 UTC #1
I'm an Australian based design freelancers paying all my taxes in Australia too.
One of my clients from the US asked me to fill out a form called*W-8BEN (see here:*http://drp.ly/1Kk26B)
As this is the first time any of my US clients asked me to do that, I'm a bit hesitant. My search online suggests that I have to fill it out of the 'employer' requests it, but it's not entirely clear. This page from the ATO didn't clarify it for me either*http://www.ato.gov.au/corporate/content.asp?doc=/content/55549.htm*
Do you guys know anything about the situation on tax withholding on income from the US? Do I have to fill out this form?
Thanks for your help, as always.
felgall 2010-09-17 06:49:07 UTC #2
That is the form that says that you are resident in and pay tax in Australia and that therefore the client is not required to deduct tax in the USA when they pay you.
If you don't sign the form then presumably
they'd deduct US tax from what they pay you. I don't know that for sure though as I have always filled out that form when dealing with US based companies (have a signed copy stored on my computer I can email to them when they ask for it (since they all do prior to paying).
Sagewing 2010-09-17 21:28:17 UTC #3
You can sign the form as you should be subject to the tax treaty and not have any withholding whatsoever. However, this really only applies if you are operating as an individual - if you are incorporated into any non-person entity you should refuse to sign it.
I am on the other side of this one all the time. Not much risk to the vendor. Make SURE that the client doesn't think that they have to withhold ANYTHING AT ALL or REPORT ANYTHING TO ANYONE about your transaction.
Once you tango with the IRS, you are dance partners for life. I just made that up, thank you very muchSource: community.sitepoint.com